PRODUCT
Definition Product gap refers to the situation where a company is not being able to sell their existing products in the marketplace, therefore, not getting revenues. Having a product that was really successful in the past does not mean that this product will keep being successful in the future, according to Ash Maurya "Your product is not THE product". Characteristics ' *Customer segments are not well defined *Customer needs have not been correctly identified or they are the only thing taken into account *No response to competitors lame product line development, products are slow to evolve *The company is focusing on its own needs The product gap is very important because its necessary for a firm to create a products which corresponds to a demand and to consumers’ needs. The goal of every company is to make profits, and to achieve this goal, the firm must sell products. A very good product which is cost effective and even very technically advanced won’t be sold if does not satisfied consumers needs. Successful organizations know how to translate identified needs into tangible product attributes. ''For example a company may be too concerned about the costs, thinking that "cheap price" is the most valued characteristic of the product, when there are other aspects that can be done which will deliver more value to customers. Companies who look to reduce costs, enable operations at scale, or create reusable value for other customers may be missing high growth opportunities other than price sensitive customers, focusing only on reducing costs may lead a company to create products that are less acceptable by the users for whom the product was originally conceived. Looking for the needs of customers and what do they value the most can assist in the creation of a company's master piece. '' Diagnostic To determine whether or not a company is facing a product gap, a series of questions can be asked: Do the products' attributes create value for the buyer/consumer? Is new product development time optimal compared to the competitors? Does your team stay on time and budget? Case example '''Clay Christensen: “Milkshake Marketing Case” ' About 95% of new products fail, mostly because companies don’t look at products the way consumers do. Indeed, most see products as a way of getting a job and companies often forget it. When companies plan to launch new products they divide the market into product categories or the customer base into target demographics. But this segmentation is not accurate according to Clay Christensen (Harvard Business School Professor, he is the architect of and the world's foremost authority on disruptive innovation) because customers buy a product to do a job to be done. "Whereas the jobs-to-be-done point of view causes you to crawl into the skin of your customer and go with her as she goes about her day, always asking the question as she does something: Why did she do it that way?" Christensen shares the story of a fast-food restaurant chain that wanted to improve its milkshake sales. The company started by segmenting its market both by product (milkshakes) and by demographics (a marketer's profile of a typical milkshake drinker). Next, the marketing department asked people who fit the demographic to list the characteristics of an ideal milkshake (thick, thin, chunky, smooth, fruity, chocolaty, etc.). The would-be customers answered as honestly as they could, and the company responded to the feedback. But unfortunately, milkshake sales did not improve. Then, they tried to understand the "job" that customers were "hiring" a milkshake to do. They first tried to understand who buy milkshakes and when by observing customers in a restaurant, they discovered that about 40% of the milkshakes were purchased first thing in the morning, by commuters who ordered them to go. The day after they tried to understand he job to be done by asking questions and they understand that most people where buying milkshakes because they wanted something relatively tidy, and because they wanted to suck something thick in order to make funnier their commute. Understanding the job to be done, the company could then respond by creating a morning milkshake that was even thicker (to last through a long commute) and more interesting (with chunks of fruit) than its predecessor. Solution: Escaping the gap To exit the product gap, the innovation team has to perform certain activities that will help the organization refresh its products and be able to deliver more value to its customers as well as capture more revenues. It all begins with a complete diagnosis of the product design so that you can detect one or more opportunity areas focusing on market opportunities and customers' perception of value. ''Diagnose your product design'' using the following tools **Customer value canvas **QFD **9+ Point Market Strategy Framework **Lean Canvas methodology #Analyze your findings' to gain insight on growth opportunities, outcomes, and jobs to be done, and determine those that have a higher impact on the development and improvement of the product when it reaches the marketplace. #Define where to focus'' and how to win, then ideate solutions and prioritize activities that will help them achieve the product development in an efficient way. #''Validate and iterate the product on the marketplace; if the product is accepted by the customers during the trial period, it has a higher possibility for success when it is finally launched. ''Lean methodology is a really efficient way to develop the products, because you'll be using a small amount of resources, and once you want to go massive and produce higher volumes, the company must look for manufacture, assembly, quality and consistency on their product lines. Using this strategies, a company can exit the product gap by the inclusion of what they have on their portafolio or by bringing new product ideas to life, making the company sustainable through time. References Harvard Business School http://hbswk.hbs.edu/item/6496.html Category:INNOVATION GAPS